good or no good? why ,and some sources to research about , and how would be greatly appreciated .thanks.

 

  • OPM 12:11 am on September 30, 2009

    I am an economist and a professional investor. Generally speaking, stay away. Except, possibly for precious metals, the only reason for an amateur to hold commodities is as a hedge against price changes. Gold, in particular, acts as an alternative currency around the world and holding it can be an alternative to holding US currency. Silver, platinum and palladium have significant industrial uses and so their price is determined both by their value as a precious metal and by their value as an industrial material. The only other hedge a consumer might look at are gasoline hedges.

    I knew someone I couldn’t talk out of buying heating oil futures. He believed that because winter was coming heating oil prices would rise. Of course this was true, but it was already priced into the heating oil futures price. He lost money AND he was right. What I tell people, who are not professionals, who want to buy a commodity contract is what would you do with 10,000 pounds of bacon should a crisis close the market near the end of the contract period (like Sept. 11th did) and you are obligated to take physical delivery of the bacon?

    Do not buy commodities you do not really want unless you know what you are doing.

    Skip the online reading, it is designed to make you want to buy commodities online. If you are near a major university and it has either an agriculture or mining program, there will almost certainly be economics courses on commodities. Pick up as sophisticated a textbook as you can read. I happen to be at a University that is among the world leaders in commodities economics. Many of their graduates end up on the floor of the CBOT or the CME.

    If you need them or have a good understanding of their dynamics, really good understanding, they can be a very good investment. They are also good as a hedge against certain types of market shocks. They are dangerous in the wrong hands.

  • richard t 12:11 am on September 30, 2009

    you have to be disciplined and have to be watching all day……………..it is tough………….

  • Carlos G 12:11 am on September 30, 2009

    Commodities have plateaued now.

    You need to learn some technical and fundamental analysis, seasonality.

    Open a demo (paper trading) account and practice for 6 months or a year before betting real money.

  • Michael M 12:11 am on September 30, 2009

    Commodity trading advice and tips
    http://commonsensetrading.googlepages.com

  • evermore 12:11 am on September 30, 2009

    You can open an free Marketiva forex \gold\fund\indexs online trading account , with $5 reward and $20000 virtrual fund for practice .Just click the following link to open an account.
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